The Bank of England has raised interest rates from 0.5% to 0.75% – the highest level since March 2009.
The rise could mean slightly higher returns for savers, but increased costs for homeowners with variable mortgages.
More than 3.5 million people in the UK have variable or tracker rate mortgages, which are affected by changes in interest rates.
However, the majority (96%) of new mortgage loans are on a fixed interest rate, meaning these borrowers will not see any increase in their repayments in the short term.
For savers, on the other hand, the rise could lead to marginally increased returns, depending on whether banks and building societies increase their rates.
Helen Morrissey, personal finance specialist at Royal London, said that while interest rate rises are good news for savers in theory, savings rates “often remain static or increase only slightly”.
“Savers should take the opportunity to look at what is available in the market and see if they can get a better savings rate than they are currently on.”
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